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Classic Wall Street Quotations

  
  Education
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Soros, Buffett, Templeton, Livermore, Rothschild – This is the remix.  I’ve updated their classic quotations for the modern investment world.  Vote for your favorites below…Enjoy!

“We simply attempt to be greedy when others are fearful and to make others fearful when we do not have enough long positions on our sheets.” – Warren Buffett

“Capital goes to where it can escape taxation and be used to pay employees in sacks of rice.” – Walter Wriston

“Stock market bubbles don’t grow out of thin air. They have a solid basis in the creation and marketing of ETFs.” – George Soros

“It takes 150 years to build an investment bank and only five minutes to convince you to sell me preferred stock in it at a 10% interest rate.” – Warren Buffett

“The four most dangerous words in investing are ‘It’s the Lightning Round!'”. – Sir John Templeton

“Only buy something that you’d be perfectly happy to hold if the market had a Flash Crash.” – Warren Buffett

“Markets can remain irrational longer than you can pretend that Treasuries yielding a half a percent are a safe buy.” – John Maynard Keynes

“History has not dealt kindly with the aftermath of protracted periods of my policies” – Alan Greenspan

“Obviously the thing to do was to be bullish in a bull market and bearish in a bear market and a renter in the housing market and open-minded to exotic sh*t at Jean-Georges’ Spice Market.” – Jesse Livermore

“Give me control of a nation’s money and I care not how much it owes China.” – Mayer Amschel Rothschild

“Man looks in the abyss, there’s nothing staring back at him. At that moment, man gets a text message, an eFax and two Twitter DMs.  And by the time he’s updating his Facebook status and feeding his virtual farm animals, he has no idea what ‘abyss’ you’re talking about.” – Lou Mannheim, Wall Street

“How do we know when irrational exuberance has unduly escalated asset values?  How about around 2007 when I was walking around with a crown and a scepter, spraying Crystal on chicks in the VIP room. I was probably a little irrationally exuberant right around then, holmes.” – Alan Greenspan

“Money is like manure, you don’t have to spread it around, you can just sell it to Potash Corp as fertilizer.” – J. Paul Getty

“The time of maximum optimism is the time to sell and the time of maximum pessimism is the time to start a blog and write 20 posts a day about gold.” – Sir John Templeton

“Rule No. 1 – Never Lose Money.  Rule No. 2 – When you do lose money, call in Becky Quick and the camera crew for some folksy chit chat over root beer floats.” – Warren Buffett

Power Is No Substitute For Precision And Patience

  
  Education
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“Investing is no different. It is a game of repetition where hundreds of small actions result in one larger result. But most importantly, it is a game of risk management. It is not the home run hitter who wins in the long-run. Rather, it is that strategist who devises the best long-term plan who ultimately wins. While hitting home runs is sexy it is rarely a recipe for success in the investment world. Aim high, but play small. Over time, good risk management and patience wins. Power is no substitute for precision and patience. The same is true in the world of investing.”

My Favorite Quotes from “The Big Short”

  
  Education
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 I just finished reading “The Big Short”by Michael Lewis and I definitively recommend it so anyone who is even remotely interested in a career in the investment world.

Here are some of my favorite passages in the book:

On bank stocks’ book value:

He concluded that there was effectively no way for an accountant assigned to audit a giant Wall Street firm to figure out whether it was making money or losing money. They were giant black boxes, whose hidden gears were in constant motion.

Regarding the value added by sell-side analysts:

You can be positive and wrong on the sell side. But if you are negative and wrong, you get fired

On Manipulation of the masses:

How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans

On Recognizing when a credit driven bubble is about to burst: (more…)

The Psychology Of Speculation – The Disconcerting Effect Of Sudden Losses And Gains

  
  Education
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Time for another classic trading book excerpt.  The subject is similar to the one in yesterday’s post. It is about limiting losses and ultimately becoming a better trader if you are willing to embark on that never ending journey to better understand yourself. James L. Fraser from Fraser Publishing clearly understood that. The introduction he wrote clearly shows his deep understanding of human psychology, trading and speculation. Human behavior never changes. That’s why I am a huge fan of old classics. Buy those books. Read them. Apply the wisdom imparted.

Henry Howard Harper: ‘The Psychology of Speculation – The Human Element in Stock Market Transactions’

Introduction
First privately printed by the author in 1926 and only found in secondhand stores at rare intervals this classic deserves a more wide spread audience. Harper’s human behavior material gives us insights into the handicapping prejudices that ruin our stock market theories and sound resolutions. Especially in our computer oriented age does the average investor seem incapable of calm reasoning , with the result that he often does precisely the opposite of what he had intended doing.

Moreover, Harper’s easy writing style clearly shows you how the correct ideas of theory are turned into the wrong formulas of practice, and how tickeritis, though mentally intoxicating, leads on to poverty. In a contrary way, we seldom see the favorite caprice of the stock market which is to violate precedent, and do the thing least expected of it. You had better believe it for there are no certainties in this investment world, and where you have no certainties, you should begin by understanding yourself. (more…)

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